Excelsior Mining finalized an offtake agreement to sell 100% of its copper cathode production in 2020 from its Gunnison copper project in Arizona to Trafigura Trading, the miner said Wednesday.
"For an open-pit mine, you normally do an offtake agreement to demonstrate to the market that you can sell your product at the end of the day," JJ Jennex, Excelsior's vice president of corporate affairs, told S&P Global Platts in an interview.
Phoenix-based Excelsior forecasts pure copper cathode production at Gunnison to begin in the second quarter of 2020.
Jennex said the securing of an offtake partner meets conditions included in Excelsior's metal streaming agreement with Triple Flag Mining for the financing of the Gunnison project.
Excelsior's offtake agreement with Trafigura will continue until the end of the year. "Then we'll look at extending it or we'll make a different announcement at the end of the year," Jennex said.
Though Excelsior has not experienced any impact from the coronavirus outbreak, Jennex said the deal adds a level of confidence for the company's upcoming production.
Excelsior bought the past-producing Gunnison project in 2015 and is completing the retrofit of the site's wellfield to restore fluid recirculation in the mine this month, according to Jennex.
The miner expects to produce 2.2 billion lb of pure copper cathode over an estimated mine life of 24 years at Gunnison, with direct operating costs of 65 cents/lb and all-in costs of $1.23/lb, according to the company's website.
Gunnison has measured and indicated mineral resources of 873 million st containing 4.99 billion lb of total copper.
Trafigura declined to comment or provide additional information Wednesday.
Source: Platts |
